Online Payday Loans

Wednesday, November 3, 2010

As if payday loans weren’t bad enough…now we have payday loans available online to make things even worse.

The payday loan available out there on the street is financially risky. The interest rate they are charging for a small loan is evil. When a person can’t make the loan on time, it rolls over and the interest climbs to rates that some people are calling criminal. In fact, some states are passing laws to lower the legal interest rate limit and put an end to these types of loans.

The payday loan available online is financially and personally risky. By going into this type of loan online a borrower is now combining the ridiculous interest rates with the risk of their personal information being shared or abused.

One such abuse was done by an online lender that linked their online loan application to a debit card application. All the information the borrower had entered for the loan was transferred to the debit card application site. In order to reject the debit card the borrower had to realize they had been transferred to a new site and change a button that was preselected as “YES” to “NO” in order to not accept a card they had no idea they were applying for. By hitting the submit button that the applicants thought meant for the loan only, they were agreeing to a loan AND a new debit card. Soon after a card would come in the mail and finance fees would be drawn from the bank account information that was given for the loan application.

Not all online payday loan sites are going to this extreme. Others are being slyer about it. They can be charging well over the legal limit in interest rates by being run on Native American reservations or out of the United States entirely to avoid being held to any state limit. There are others that do not operate as payday loans at all. They advertise that it is a one time pay off loan. But after clicking the button to accept their terms what the borrower has done is agree to something entirely different. Sadly, it is too late since the borrower has already entered all of their personal information on the application.

These are just a few examples of the many types of scams out their associated with online lending. The bottom line is that payday loans are a bad enough idea. If you really need a payday loan then go to a lender in the real world that you can speak to. Do not give your account information. Just do the standard check-writing type of loan. If your state has pushed these types of lenders out by holding them accountable to an interest rate limit, be thankful. This type of loan was not good for you and it is time to explore other ways of making ends meet. The internet route is entering a whole new level of danger. Don’t go there!